I'm not certain if the issue is in the Firefox add-on itself or on how the server processes, so this needs looking into, but I suspect it's on the server end. A way to reproduce:
1. Navigate to Gmail
2. Compose a new message (IMPORTANT: in rich text)
3. Add two lines of whatever text (i.e., "Hello, my name is Michael.")
4. Center one of the two lines.
5. Select text going from one line to the other (i.e., highlight from "is Michael." on the first line to "Hello, my name" on the second). The selection range can be as large or as small as you like, as long as it covers more than one line.
6. Accentuate the selected text to any language.
You will notice the resulting text splits off at the end of the selection range.
I can determine where the issue lies in a bit by doing a window.alert on the text being sent to and coming back from the server. If the response text contains the newline, the error is in the server code, else it's with the Firefox add-on. Assigning to no one until I run this test.
Assigning to myself--the error is on the way the Firefox add-on replaces the text.
Retargeting to 1.0 release (possible candidate for an intermediate 0.9 release).